Streamlined Accounting (GST/HST) Regulations (SOR/91-51)

Calculation of Net Tax

• 21.3 (1) If an election by a registrant to determine the net tax of the registrant in accordance with this Part is in effect during a reporting period of the registrant, the net tax of the registrant for the reporting period is, subject to this Part, the positive or negative amount of net tax for the reporting period determined in accordance with

  • (a) if the registrant has filed an election to determine the net tax of the registrant in accordance with Part IV that is in effect during the reporting period, Part IV;

  • (b) if the registrant has filed an election to determine the net tax of the registrant in accordance with Part V that is in effect during the reporting period, Part V; and

  • (c) in any other case, subsection 225(1) of the Act.

• (2) If personal property or a service is supplied in Canada to a registrant by another person, or tangible personal property is supplied outside Canada to a registrant by another person and imported by the registrant, and the registrant is entitled to claim an input tax credit in respect of the property or service for any reporting period of the registrant, for the purposes of determining

  • (a) an input tax credit of the registrant in respect of the property or service for a particular reporting period of the registrant, and

  • (b) an amount that is required by subsection 235(1) of the Act to be added in determining the net tax of the registrant for any reporting period,

  for the purposes of this Part, the amount of tax under Division II or III, as the case may be, that became payable, or was paid without having become payable, by the registrant during the particular reporting period in respect of the supply or importation of the property or service is deemed to be equal to the amount determined by the formula

  A × B

  where

  A

  is the amount determined by the formula

  C / D

  where

  C

  is

  • (i) if tax under subsection 165(2) or section 212.1 of the Act was payable in respect of the supply or importation, the total of the rate set out in subsection 165(1) of the Act and the tax rate of the participating province that applied in respect of the supply or importation, and

  • (ii) in any other case, the rate set out in subsection 165(1) of the Act, and

  D

  is the total of 100% and the percentage determined for C, and

  B

  is the total of all amounts each of which is

  • (a) the consideration that became due, or was paid without having become due, by the registrant during the period in respect of the supply of the property or service to the registrant,

  • (b) the tax under Division II or III that became payable, or was paid without having become payable, by the registrant during the period in respect of the supply or importation of the property or service,

  • (c) in the case of tangible personal property that was imported by the registrant, the amount of a tax or duty imposed in respect of the property under the Act (other than Part IX), the Customs Act, the Special Import Measures Act or any other law relating to customs, that became due, or was paid without having become due, by the registrant during the period,

  • (d) the amount of a tax, duty or fee prescribed by paragraph 3(b) or (c) of the Taxes, Duties and Fees (GST/HST) Regulations that became due, or was paid without having become due, by the registrant during the period in respect of the property or service, other than tax imposed under an Act of a legislature of a province to the extent that the tax is recoverable by the registrant under that Act,

  • (e) a reasonable gratuity paid by the registrant during the period in connection with the supply, or

  • (f) interest, a penalty or other amount paid by the registrant during the period if the amount was charged to the registrant by the supplier because an amount of consideration, or an amount of a tax, duty or fee referred to in paragraph (c) or (d), that was payable in respect of the supply or importation was overdue.

• (3) Subsection (2) does not apply to a passenger vehicle or aircraft acquired or imported by a registrant who is an individual or a partnership for use as capital property of the registrant otherwise than exclusively in commercial activities of the registrant.

• (4) For the purposes of this Part, if any of paragraphs 13(7)(g) to (i) of the Income Tax Act deems an amount to be the capital cost to a registrant of a passenger vehicle for the purposes of section 13 of that Act, the amount, if any, by which

  • (a) the total of all amounts each of which is an amount of tax that is deemed by subsection (2) to have become payable, or to have been paid without having become payable, by the registrant in respect of the acquisition or importation of the vehicle or the acquisition or importation of an improvement to the vehicle,

  exceeds

  • (b) the amount determined by the formula

    A × B

    where

    A

    is the amount determined by the formula

    C / D

    where

    C

    is

    • (i) if tax under subsection 165(2) or section 212.1 of the Act was payable in respect of the acquisition or importation, the total of the rate set out in subsection 165(1) of the Act and the tax rate of the participating province that applied in respect of the acquisition or importation, and

    • (ii) in any other case, the rate set out in subsection 165(1) of the Act, and

    D

    is the total of 100% and the percentage determined for C, and

    B

    is the amount deemed by any of paragraphs 13(7)(g) to (i) of the Income Tax Act to be the capital cost to the registrant of the vehicle for the purposes of section 13 of that Act,

  shall not be included in determining an input tax credit of the registrant for any reporting period of the registrant.

• (5) For the purpose of determining, in accordance with this Part, an input tax credit of a partnership, an employer, a charity or a public institution that pays an amount as a reimbursement in respect of property or a service acquired or imported by a member of the partnership, an employee of the employer or a volunteer who has given services to the charity or public institution and in respect of which the member, employee or volunteer was liable to pay tax under Division II or III, the amount of that tax is deemed, for the purpose of applying section 175 of the Act, to be equal to the amount that would be determined under subsection (2) if that subsection applied to the acquisition or importation by the member, employee or volunteer.

• 21.4 (1) An amount shall not be included in determining the value of B in subsection 21.3(2) in respect of a reporting period of a registrant during which an election to determine the net tax of the registrant in accordance with this Part is in effect if the amount became payable, or was paid without having become payable, by the registrant while the election was not in effect.

• (2) If an election to determine the net tax of a registrant in accordance with this Part ceases to have effect during a reporting period of the registrant and tax under Division II or III becomes payable or is paid without having become payable by the registrant, after the election ceases to have effect but during the period, in respect of a supply or importation of property or a service, for the purposes referred to in paragraphs 21.3(2)(a) or (b), the amount of tax that became payable or was paid without having become payable by the registrant during the period in respect of that supply or importation is, despite subsection 21.3(2), deemed to be equal to the total of

  • (a) the amount that would, but for this subsection, be determined under subsection 21.3(2) in respect of that supply or importation, and

  • (b) the tax under Division II or III that became payable or was paid without having become payable by the registrant, after the election ceased to have effect but during the period, in respect of that supply or importation.

Prescribed Part

21.5 This Part is a prescribed Part for the purposes of subsection 227(4.2) of the Act.

PART VIPrescribed Input Tax Credits

22 Where an election by a registrant to determine the net tax of the registrant in accordance with any Part of these Regulations ceases at any time to have effect, every input tax credit that the registrant would have been entitled to include in determining the net tax for a reporting period of the registrant ending at or before that time, but for the fact that the registrant did not claim the input tax credit in any return under Division V filed by the registrant for a reporting period of the registrant ending at or before that time, is a prescribed input tax credit for the purposes of subsection 227(5) of the Act that the registrant may claim in a return filed for a reporting period of the registrant ending after that time.

PART VIIGeneral Rules

23 [Repealed, SOR/99-368, s. 13]

• 24 (1) Subsections 225(2) to (3.1) of the Act apply, with any modifications that the circumstances require, for the purpose of determining the net tax for a reporting period of a registrant in accordance with any Part of these Regulations.

• (2) For the purposes of these Regulations, if, under subsection 168(3), (6) or (7) of the Act, tax under Division II in respect of a supply of property or a service becomes payable by a registrant on a particular day,

  • (a) the consideration on which that tax is calculated, and

  • (b) any tax, duty or fee prescribed by paragraph 3(b) or (c) of the Taxes, Duties and Fees (GST/HST) Regulations that is payable by the registrant in respect of the property or service and has not become due on or before that day,

  is deemed to have become due on that day.

• (3) For the purposes of determining any amount in accordance with these Regulations, other than an amount of net tax that is required by these Regulations to be determined in accordance with subsection 225(1) of the Act, the following rules apply:

  • (a) where at any time a supplier, in full or partial consideration for a supply of property or a service, accepts a coupon, voucher or other device (other than a gift certificate) that may be exchanged for the property or service or that entitles the recipient of the supply to a reduction of, or a discount on, the price of the property or service, and the supplier is entitled to be paid by another person an amount for the redemption of the coupon, voucher or device, the coupon, voucher or device shall be deemed to be consideration for the supply and tax calculated on that consideration shall be deemed to have become collectible, and to have been collected, at that time;

  • (b) where the consideration for a supply shown in the invoice in respect of the supply may be reduced if the amount thereof is paid within a time specified in the invoice and that consideration is so reduced, the consideration for the supply shall be deemed to be equal to the reduced amount of consideration and the total tax collected or collectible in respect of the supply shall be deemed to be equal to the tax calculated on the reduced amount of consideration;

  • (c) if consideration, or a part of it, for a taxable supply (other than a supply by way of sale of real property) made by a supplier in the course of activities engaged in by the supplier in a branch or division of the supplier becomes due, or is paid without having become due, to the supplier at a time when the branch or division is a small supplier division (within the meaning of subsection 129(1) of the Act), that consideration or part, as the case may be, is deemed not to be consideration for a taxable supply; and

  • (d) if property or a service is acquired by a person for consumption, use or supply in the course of activities engaged in by the person in a branch or division of the person and, at a time when the branch or division is a small supplier division (within the meaning of subsection 129(1) of the Act), an amount becomes due, or is paid without having become due, by the person for the supply of the property or service to the person, the amount shall not be included in determining the purchase threshold under subsection 21.1(3) for any fiscal year of the person.

• (4) For the purpose of determining any amount in accordance with Part IV of these Regulations, other than an amount of net tax that is required by these Regulations to be determined in accordance with subsection 225(1) of the Act, if at any time a registrant, who has filed an election that is in effect at that time, makes a taxable supply of property or a service to a person with whom the registrant is not dealing at arm’s length for no consideration or for consideration less than the fair market value of the property or service at that time, the supply is deemed to have been made for consideration, paid at that time, equal to that fair market value and tax calculated on that consideration is deemed to have become collectible, and to have been collected, at that time.